SolarWinds Stock Soars After Q2 Performance: Here's Why

SolarWinds Corp SWI stock is trading higher after the company reported a second-quarter FY23 revenue growth of 5% year-on-year to $185 million, beating the consensus of $179.5 million. Non-GAAP EPS of $0.21 beat the consensus of $0.17.

Maintenance revenue grew by 1.8% Y/Y to $116.1 million. Subscription revenue climbed 44.4% Y/Y to $53.4 million, while License revenue declined 37.8% to $15.6 million.

Non-GAAP gross margin decreased by 120 bps to 90.3%, and the adjusted EBITDA margin increased by 480 bps to 42.8%.

SolarWinds held $178.2 million in cash and equivalents.

CEO Sudhakar Ramakrishna said, "We are grateful for the trust our customers and partners place in us, and we have experienced continued momentum with our subscription transition and broad portfolio of observability, service management, and database solutions, enabling us to raise our total revenue and adjusted EBITDA outlook for the full year."

Outlook: SolarWinds sees Q3 revenue of $182 million- $186 million, versus the consensus of $182.21 million.

It sees Q3 non-GAAP EPS of $0.17 - $0.19 versus the consensus of $0.18.

SolarWinds increased FY23 revenue to $740 million - $748 million (prior $725 million - $740 million) versus the consensus of $734.18 million.

SolarWinds raised the FY23 non-GAAP EPS outlook to $0.76 - $0.79 (prior $0.71 - $0.76) versus the consensus of $0.73.

Price Action: SWI shares traded higher by 10.40% at $11.22 on the last check Thursday.